Tadawul Review:

Tadawul All Share Index (TASI) extended its losses for the third consecutive session losing 168 points (-0.9%) to close at 11,358 levels, its lowest closing since 23rd June. From the start the market faced downward pressure, hitting a low of 11,298 levels before partially paring losses. The decline was led by the index heavyweight namely Saudi Aramco (-1.3%) which contributed a negative 23 points to the index. However, the downward slide was broad-based as 17 out of 20 sectors closed negative while the advance to decline ratio stood at an abysmal 0.22x. Materials (-2.2%), Banks (-0.4%), and Energy (-1.3%) sectors contributed 65 points to the index losses. Some stocks, mainly pertaining to the REITs sector, managed to buck the trend with Jadwa Reit (+4.8%) and Dar Al Arkan (+4.6%) being the top gainers for the day. Trading activity remained thin when compared to a 3-month average, however, volume and value traded managed to improve by 10% and 12% DoD to 136mn shares and SAR4.4bn.

Market Wrap International:

The global equity indices moved in a nervous fashion on Monday amid the closure of the cash trading market in the U.S due to a national holiday. The futures contracts on the U.S indices edged lower by 0.2-0.5% in regional trading. A major development on Monday includes the announcement of President Biden to ease tariffs on imports from China in a bid to reduce inflationary pressure. The US markets will restart trading today (Tuesday) after the Independence Day holiday.

In Europe, the benchmark Stoxx Euro 600 Index rose by +0.5% driven by commodity, energy, and telecom stocks. The increase in bond yields in Germany and Italy and a strong rebound in gas prices in Europe were the major focus areas for investors.

In Asia, markets moved sideways with a drop in commodity prices and the latest flare-up in infection in China pulling the markets in competing directions. Indices in Japan (Topix: 1.3%), and India (SENSEX: +0.6%) moved higher. Similarly, China’s Shanghai Composite rose by +0.5% despite concerns over a new virus plus a default of payment by a real estate company). Hong Kong (HangSeng: -0.1%), and South Korea (KOSPI: -0.2%) markets came in under selling pressure.